Shenzhen-based BYD, which specializes in green energy cars, forecast a 20.3 percent to 31.4 percent fall in net profit for the first half to 1.55 billion to 1.8 billion yuan ($261.10 million), in what would be the biggest drop in first half profits since 2012, according to Reuters data.

“The scale back of subsidies on new energy vehicles put pressure on profit, while competition will still be intense in traditional vehicle sectors in the second quarter,” BYD said in a stock exchange statement released on Friday.

BYD’s weakening net profits are a marked shift from massive profit growth over the last two years, annual net income increased more than 10-fold from 2014 to 2016, as demand for green cars boomed thanks to aggressive government support.

But demand has wavered this year as the central government has cut its massive subsidy payouts for green cars by 20 percent, raised barriers to entry for new electric car models and debated easing proposed quotas for plug-in cars.

For the first quarter, BYD reported 605.8 million yuan in profit, a 28.8 percent decrease year-on-year, in line its forecast last month of a 24-35 percent fall.

Sales of plug-in hybrid and battery electric cars fell nearly 5 percent in January to March compared with the same period a year ago, China’s Association of Automobile Manufacturers said. ($1 = 6.8938 Chinese yuan renminbi) (Reporting by Muyu Xu and Jake Spring; editing by Susan Thomas and Alexander Smith)